Federal court transfers Texas client’s legal malpractice claim against Mississippi lawyers, over handling of case in Mississippi, to Mississippi under convenience principles.
Clients often bring malpractice claims where they are located and not necessarily where the lawyers, or the case the lawyers handled, are located. In Nabors Drilling USA, L.P. v. Markow, Walker & Reeves, P.A., Civil Action No. H-05-3044, 2006 U.S. Dist. Lexis 57529 (S.D. Tex. 2006), the court transferred a legal malpractice case under the convenience principles of 28 U.S.C. § 1404(a).
Defendants Michael Young ("Young") and Robert Niles Hooper ("Hooper") are Mississippi attorneys with a Mississippi law firm, Defendant Markow Walker, P.A., formerly Markow Walker & Reeves, P.A. (collectively, "Markow"), who represented Plaintiff Nabors Drilling USA, LP ("Plaintiff"), a Delaware corporation with its principal place of business in Houston, Texas, in two separate matters pending in Mississippi. Plaintiff has filed two suits against the Mississippi lawyers who in Mississippi defended the Mississippi proceedings, alleging against them in this case legal malpractice, breach of contract, and fraud.
In the first matter, Gallagher Bassett Services, Inc. ("GBS") – the third-party administrator for Plaintiff’s insurance carrier, Continental Casualty Company – employed Markow to defend a worker’s compensation claim (the "Claim"). Young was the Markow attorney assigned to handle the Claim. In the second matter, Markow represented Plaintiff in the lawsuit that Malone filed in Mississippi state court against Plaintiff and GBS for the alleged bad faith handling of the Claim (the "Lawsuit"). Hooper was the Markow attorney assigned to handle the Lawsuit.
Plaintiff alleges that Defendants (1) failed to seek dismissal of Malone’s bad faith claim against Plaintiff; (2) failed to provide adequate and sufficient advice to Plaintiff regarding the Claim; (3) caused and/or failed to prevent delay in the payment of worker’s compensation benefits to Malone; (4) fraudulently represented to Plaintiff that GBS had properly adjusted Malone’s Claim; (5) fraudulently represented to Plaintiff’s Assistant General Counsel Laura Doerre ("Doerre") that Defendants did not have a conflict of interest in defending Plaintiff in both the Claim and the Lawsuit; (6) fraudulently continued to represent Plaintiff without advising Plaintiff of the conflict; and (7) breached a contract for legal services by failing properly, timely, and in good faith to adjust Malone’s Claim.
Defendants now move to dismiss this action for lack of personal jurisdiction, arguing that Defendants’ representation of Plaintiff in the Claim and Lawsuit occurred wholly in Mississippi and that Defendants do not have sufficient minimum contacts with Texas to warrant the exercise of personal jurisdiction. Alternatively, Defendants argue that the case should be dismissed because venue is not proper in the Southern District of Texas. The court declined to resolve the personal jurisdiction issues, instead simply opting sua sponte for transfer under § 1404(a).
Section 1404(a)
A district court may transfer any civil case "[f]or the convenience of parties and witnesses, in the interest of justice, . . . to any other district or division where it might have been brought." 28 U.S.C. § 1404(a). The purpose of § 1404(a) is "to prevent the waste of time, energy, and money and to protect litigants, witnesses, and the public against unnecessary inconvenience and expense." DataTreasury Corp. v. First Data Corp., 243 F. Supp.2d 591, 593 (N.D. Tex. 2003) (citations omitted). The decision to transfer a pending case is committed to the sound discretion of the district court. Jarvis Christian College v. Exxon Corp., 845 F.2d 523, 528 (5th Cir. 1988). In exercising this discretion, "the trial court must consider ‘all relevant factors to determine whether or not on balance the litigation would more conveniently proceed and the interests of justice be better served by transfer to a different forum.’" Peteet v. Dow Chem. Co., 868 F.2d 1428, 1436 (5th Cir. 1989) (quoting 15 Charles A. Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice & Procedure, § 3847 at 370 (1986)).
Although the plaintiff’s choice of forum is "clearly a factor to be considered, . . . [it] is neither conclusive nor determinative," and has reduced significance where most of the operative facts occurred outside the district. See In re Horseshoe Entm’t, 337 F.3d 429, 434 (5th Cir. 2003); Lindloff v. Schenectady Int’l, 950 F. Supp. 183, 185 (E.D. Tex. 1996).
Other factors courts consider in deciding whether to transfer a case include: (1) the availability and convenience of the witnesses and parties; (2) the availability of process to compel the presence of unwilling witnesses; (3) the cost of obtaining attendance of witnesses; (4) the relative ease and access to sources of proof; (5) where the events took place; (6) administrative difficulties flowing from court congestion; (7) the familiarity of the forum with the law that will govern the case; (8) the avoidance of unnecessary problems of conflict of laws of the application of foreign law; (9) judicial economy; and (10) the interest of justice in general. See In re Volkswagen AG, 371 F.3d 201, 203 (5th Cir. 2004); DataTreasury, 243 F. Supp.2d at 593; Republic of Bolivia, 39 F. Supp.2d at 1009-10; Gundle Lining Constr. Corp. v. Fireman’s Fund Ins. Co., 844 F. Supp. 1163, 1165 (S.D. Tex. 1994).
The court’s analysis
After noting that "Plaintiff in all likelihood has made a prima facie case for specific jurisdiction over Hooper and, through him, the law firm, based on Hooper’s delivery of letters to Plaintiff and its representative in Texas that at least in part are the basis for Plaintiff’s professional malpractice claim," the court then analyzed whether to transfer the case under Section 1404(a):
None of Defendants resides in or has a place of business in Texas, while it is undisputed that Plaintiff has an established business presence in Mississippi, where its insurance company representative employed Mississippi counsel to defend its interests in the Mississippi courts. Virtually all of the events or omissions giving rise to Plaintiff’s claims – from the time of Malone’s on-the-job injury and the filing of his compensation claim to the present – originated or occurred in Mississippi. The majority of relevant witnesses – including Malone, Malone’s attorney, Plaintiff’s employees with knowledge of the events giving rise to the Claim, Defendants, and any expert witnesses on Mississippi worker’s compensation law, or professional malpractice in Mississippi – are assuredly all located in Mississippi. It was in Mississippi that Defendants were employed to work on Mississippi litigation, and Mississippi law will govern both the contract and Plaintiff’s claims that Defendants committed professional malpractice; and the United States District Court in Mississippi is expert in the law of Mississippi. Although Plaintiff argues that Ms. Lankford, to whom one of Hooper’s letters was addressed, is beyond the subpoena power of the Mississippi courts, she is an employee of Plaintiff’s insurance broker, which undoubtedly values Plaintiff’s business, and there is no evidence that Ms. Lankford would be either an unwilling witness or would not testify in Mississippi if asked to do so by Plaintiff. Indeed, in arguing for personal jurisdiction over Defendants in Texas, Plaintiff emphasized that Ms. Lankford was a representative of Plaintiff and gave no indication whatever that she was not firmly lodged in Plaintiff’s camp, much less that she would be an uncooperative or unwilling witness.
In addition, judicial economy weighs heavily in favor of transferring the case to Mississippi, given that (1) Plaintiff has pending essentially the same case against the same Defendants in the Southern District of Mississippi, where venue is proper and where all Defendants are subject to personal jurisdiction; and (2) the likelihood evident from the parties’ submissions that this Court probably does not have personal jurisdiction over Young and therefore could not adjudicate all of Plaintiff’s claims in a single action. See DataTreasury, 243 F. Supp.2d at 594 ("To permit a situation in which two cases involving precisely the same issues are simultaneously pending in different District Courts leads to the wastefulness of time, energy, and money that § 1404(a) was designed to prevent. Moreover, such a situation is conducive to a race of diligence among litigants for a trial in the District Court each prefers.") (quoting Continental Grain Co. v. Barge FBL-585, 80 S. Ct. 1470, 1474 (1960)); cf. Posven, C.A. v. Liberty Mut. Ins. Co., 303 F. Supp.2d 391, 406 (S.D.N.Y. 2004) ("[I]t is well-established that the ability to implead a third-party in the proposed transferee forum and thereby resolve related claims in a single action weighs heavily in favor of transfer.").
In sum, virtually everything about this case cries out, "Mississippi!" The appropriately considered factors on balance heavily weigh in favor of a § 1404(a) transfer to that State in which may be found the vortex of the entire controversy. Accordingly, both for the convenience of the parties and witnesses and also, most decidedly, to serve the interest of justice, this case will be transferred to the Southern District of Mississippi.
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